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As marketing chief for a small chain of Southern furniture stores, Robert Hodgson almost laughed when he first heard the pitch. A representative from BedroomFurniture.com, a longtime foe of all local furniture retailers, had called with a proposition. What if Hodgson’s chain, Brashears, with its three brick-and-mortar showrooms in Missouri and Arkansas, began paying the national website to steer potential customers his way? The proposal struck him as almost comically naïve. “I definitely had to consider all sorts of questions,” Hodgson recalls. Most obviously: if the customer leads were really so great, why would a competitor sell them to him?

That was a year ago. Today, a customer in northern Arkansas who starts hunting for the perfect bureau stands a good chance of browsing at BedroomFurniture.com but buying where locals have been going for the last 75 years–at a Brashears store.

BedroomFurniture.com will still happily sell to such shoppers directly. But when its servers notice a customer spending a lot of time researching without putting any items in an online cart–or putting lots of stuff in the cart without ever buying–the website changes tack, alerting the customer to a place to buy that item in his or her own neighborhood. The company now has deals with more than 100 local brick-and-mortar stores.

Welcome to one of the growing networks of “frenemies” that are cropping up across dozens of industries. In many ways, the idea of marketing your competitor’s products online is a natural extension of Amazon’s “coöpetition” business model. The e-commerce pioneer has long made it easy for its customers to buy goods from thousands of smaller retailers. Search Amazon for an iPhone power cord, and Amazon won’t just offer a path to a competitor’s website but will handle the whole transaction on that site. In September it extended that model further, announcing a new “Amazon Payments” business that will let it run the billing systems of other websites.

But while Amazon’s version of sharing customers seems to be a great deal for Amazon, it can be an unstable relationship for the smaller partner. Online retailer Ben Swett, who until recently ran an online gardening supply store, was always wary of his partnership with the site. “I would sell an item on Amazon and once it became popular, Amazon would start selling the exact same thing,” Swett says. Amazon declined to comment on its online strategy.

Skepticism about such arrangements is inevitable, says John Mulliken, who oversees the “GetItNearMe” system that BedroomFurniture.com uses to partner with former brick-and-mortar foes. He sometimes promises stores that he’ll send them customers for a few weeks without charge so they can see the quality of the sales leads. Unlike the Web traffic that comes from Google, Yahoo, and other generic search engines, which tend to attract people just starting to search for furniture, BedroomFurniture.com is able to serve up customers who are further along in the process and better informed, he says.

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Credit: CSN Stores

Tagged: Business

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